WASHINGTON — The Space Development Agency’s plan to award new contracts this month for its next set of missile warning/missile tracking satellites is in limbo, having fallen victim to the Pentagon’s wave of fiscal 2025 budget “clawbacks” being used to pay troops during the ongoing government shutdown, according to government and industry sources.
“We were supposed to hear by Thanksgiving who wins,” one industry representative told Breaking Defense. “When the funding will be authorized, given the shutdown and all the fun there, is a question mark.”
The Pentagon announced last month that it planned to pull $8 billion from “unobligated” research and development coffers in order to pay troops during the shutdown, but since then, little has been revealed about what specific programs are feeling the pinch.
“It’s so much [money], it’s basically everything,” one congressional aide said.
As for the the tracking satellites, according to the SDA’s April solicitation, three winners are to be chosen to each provide 18 satellites (54 total) for the Tranche 3 Tracking Layer constellation — part of a larger planned network of hundreds of satellites in low Earth orbit (LEO) to track not just ballistic but also hypersonic cruise missiles.
Tranche 3 would expand on the capabilities being provided by earlier design iterations under Tranche 1 and Tranche 2, and provide global surveillance of missile launches using infrared sensors.
Spokespeople for the Defense Department and Space Development Agency did not respond to requests for comment Friday.
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According to the Space Force’s FY26 budget submission, the agency originally was slated to make awards worth $237 million for the Tranche 3 Tracking Layer in October using FY25 funds. In December, it was to make another round of awards worth $536 million using FY26 funds.
However, a second industry source said that SDA has taken a total hit of $700 million in the clawback — noting that some planned Tranche 2 Tracking Layer “milestones” also are likely to be delayed. Between October and December, about $357 million was slated to go to such payments, the source added.
While it is unclear at the moment when the shutdown will end — and even less clear how funds for FY26 finally will make their way into the Pentagon’s coffers as Congress continues to battle over the budget — one government source with acquisition expertise explained that the DoD plan is to pay back the RDT&E funds borrowed from most, if perhaps not all, programs.
That includes the Tranche 3 Tracking Layer, the source said, because missile warning/tracking from LEO is considered a key enabler for President Donald Trump’s Golden Dome initiative designed to develop a comprehensive missile defense shield over the US homeland. The first industry source agreed.
“There’s a hefty amount of money for Tracking Tranche 3 — it’s actually going to be the largest — and probably with an immense focus on fire control, which supports Golden Dome more so than than just missile warning/missile tracking. That actually is the strategic piece,” the source said.
SDA’s January 2024 contracts for the previous Tranche 2 Tracking Layer included the development of six first-iteration fire control satellites, which will carry sensors precise enough to convey targeting coordinates for interceptors. Under those contracts, worth a total of more than $2.5 billion, L3Harris Technologies will receive $919 million, Lockheed Martin $890 million and Sierra Space $740 million to each deliver and operate 18 space vehicles, including two kitted out for fire control. Those birds currently are slated to be launched no later than April 2027.
Valerie Insinna contributed to this report.